UPDATE: S&P 500 snaps 3-session win streak Wednesday as tech gets pummeled and Fed signals near 0% interest rates until 2023
U.S. stock benchmarks on Wednesday finished mostly lower as the Federal Reserve held key interest rates unchanged at a range of 0% and 0.25%, as expected, but signaled that interest rates would remain lower for at least the next three years as the economy attempts to clamber out of the coronavirus-induced recession. The Dow Jones Industrial Average finished up a meager 37 points, or 0.1%, at 28,032, but the index saw a more-than 300-point intraday swing in the aftermath of the Fed's announcement at 2 p.m. Eastern Time. The S&P 500 index declined 0.5% at around 3,386, driven lower by technology (XLK), off 1.6%, and communication services (XLC), down 1.2%. The tech-laden Nasdaq Composite Index closed down 1.3% at 11,050. Meanwhile, the small-capitalization Russell 2000 index outperformed its peers, finishing up more than 1% (on a preliminary basis). The Fed said it doesn't expect to raise rates until the end of 2023 at the earliest and set out new economic conditions that must be met before it will raise them. The Fed said it decided to keep rates near 0% and expects this will be appropriate until two things happen: labor market conditions return to the "maximum employment" and inflation has risen to 2% and "is on track to moderately exceed 2% for some time." Most economists thought the Fed would hold off on its forward guidance until November or December.
-Mark DeCambre; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
September 16, 2020 16:34 ET (20:34 GMT)
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